Javelin Mortgage Investment Spikes 17% Following Acquisition Announcement

Shares of

surged higher by more than 17 percent on Wednesday after the company

it has agreed to sell itself to

. Javelin is a real estate investment trust company that invests primarily in fixed rate and hybrid adjustable rate mortgage backed securities. As part of the agreement, Armour will acquire Javelin for $7.14 per share and values the company at 87 percent of its book value. Shares of Javelin closed for trading at $6.00 on Tuesday. The deal also places an approximate 19 percent premium to to its closing price on Tuesday. "Today's announcement is the culmination of a review process conducted by JAVELIN's Board of Directors that explored value-creation options," said John C. Chrystal, member of JAVELIN's Special Committee. "After careful consideration, and with the assistance of independent financial and legal advisors, the Special Committee concluded that this transaction with ARMOUR is in the best interests of JAVELIN and its stockholders." "We are pleased to announce this strategically and financially compelling transaction that is aligned with our focused and disciplined approach to evaluating assets for inclusion in the ARMOUR portfolio," said Daniel C. Staton, ARMOUR's Non-Executive Chairman. "Today, ARMOUR has a robust portfolio as well as a strong balance sheet. The acquisition of JAVELIN provides complementary assets that increase our flexibility and enable us to drive additional value through the diversification of our investment portfolio into non-agency mortgage-backed securities. This transaction is expected to be immediately accretive to ARMOUR's book value upon closing and to drive long-term value for our stockholders through stable and diversified risk-adjusted returns."